Richard Levick, Esq., is Chairman and CEO of LEVICK, which provides strategic communications counsel on the highest-profile public affairs and business matters globally. Mr. Levick has been named four times as one of “The 100 Most Influential People in the Boardroom.” He is the co-author of four books and a regular commentator on television and LEVICKDaily.com.
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It’s boom time for companies that develop surveillance equipment. Governments are snapping up advanced monitoring and tracking systems to boost domestic law enforcement and counter the threat of terrorism even as businesses use the technology to manage and protect sensitive data.

While business has never been better, some high-profile reputation problems are unsettling the $5 billion industry. In one instance, according to a Bloomberg Newsinvestigative series, equipment developed by NetApp Inc. was integrated into the Syrian government’s new system for scanning emails to uncover opponents of the Assad regime. In another case, according to a report in the Washington Post, technology supplied by Blue Coat Systems Inc. was used to censor and track Internet usage in Syria.

Once these reports first surfaced, it did not take long for Congress to jump into the fray. In November, a bipartisan group of Senators asked the State Department and Commerce Department to investigate whether Blue Coat and NetApp had violated U.S. export laws. The request was accompanied by suggestions that the U.S. government consider suspending its multi-million dollar contracts with NetApp pending the outcome of the investigation.

Tighter export laws may be the next step. In December, Representative Chris Smith (R-N.J.) proposed legislation (HR 3605) that would require publicly traded companies to disclose to the Securities and Exchange Commission (SEC) how they monitor human rights in countries where they do business. The bill would also bar sales of any surveillance-applicable hardware or software to countries that restrict Internet use.

U.S. export laws already require licensing for the sale or export of certain electronic surveillance technology overseas. But no system is failsafe. Distributors may redirect a shipment to an unintended buyer. A government might buy the technology for an approved purpose and then divert it to repress democratic dissent. Or today’s ally might even become tomorrow’s enemy, using our latest technology for purposes of which we do not approve.

“Putting aside the question of whether the U.S. should subject more surveillance devices, software, and technology to export restrictions, the pending investigations are a clear reminder that diversion (of technology) to sanctioned countries or entities is a risk for all exporters,” says Jeff Schwartz, a Washington, D.C.-based lawyer at Alston & Bird.

To mitigate the risks they face, surveillance technology companies need to remember just how much perception matters. Blue Coat and NetApp both denied selling equipment to Syria, which is on the U.S. sanctions list, and insist that their equipment was redirected without their knowledge. They have made it clear that they are cooperating with the investigating government agencies. After an internal review of shipment records from a distributor, Blue Coat was able to provide information to help block future transfers.

But as this latest uproar over Syria’s use of advanced U.S. surveillance technology illustrates, being right doesn’t always matter. Even blatantly false accusations can leave dark shadows on a company’s hard-won reputation.

That is why firms must not wait to act until after the bad news has already broken. Companies facing these kinds of reputation risks should take a proactive approach by establishing a crisis response strategy before trouble hits and making upfront investments in reputation management. Corporate leaders can take a cue from Blue Cote and NetApp, showing just how seriously they take the issue by working closely with government officials to determine if anything can or should be changed to reduce unlawful equipment use.

Companies may also have to consider stepping more boldly out of their comfort zones with strategies to identify in advance where problems might arise. They need to highlight the steps that can be taken to block sanctioned countries and abusers from getting improperly acquired technology. There may be no easy solutions, but conspicuously showing maximum effort is fundamental reputation management strategy.

Companies in the surveillance industry do not need to stop selling their new technology. But they do need to start selling themselves. The trick is to be in charge of the narrative – which means being there first with the story line and making sure the script is credible. That kind of basic communications strategy is simply good business, especially at such a decisive time in the history of an essential industry.

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